Covered Employer Training Program

1. Covered Employer Training Program The Retirement Process FY 2016

2. Retirement eligibility requirements - Class Two South Carolina Retirement System (SCRS)*: • Normal retirement (unreduced benefits) • Age 65; or • 28 years of service credit • Early retirement (reduced benefits) • Age 60; or • Age 55 or older with 25 years or more of service credit Police Officers Retirement System (PORS)*: • 25 years of service credit regardless of age, or • Age 55 or older *Must have at least five years of earned service.

3. Retirement eligibility requirements - Class Three South Carolina Retirement System (SCRS): • Normal retirement (unreduced benefits) • Age 65 with at least eight years of earned service, or • Rule of 90: age and years of service must add up to 90 • Example: 56-year-old member who has at least 34 years of service, would be eligible for normal retirement (56 + 34 = 90) • Must have at least eight years of earned service • Early retirement (reduced benefits) • Age 60 or older, with at least eight years of earned service • 5 percent reduction for each year member retires before age 65

4. Retirement eligibility requirements - Class Three Police Officers Retirement System (PORS): • Must have at least eight years of earned service • 27 years of service credit regardless of age, or • Age 55 or older

5. SCRS retirement application • Member submits: • Application for Service Retirement Benefits(SCRS) (Form 6101S) • Driver’s license or state issued identification card • Copy of birth certificate and beneficiary’s birth certificate if choosing a survivor option. • Pension Withholding Certificate for Monthly Annuity Payments (Form 7202) and Electronic Funds Transfer Authorization for Annuities (Form 7204) • Employer submits: • Employer Certification of Last Day Paidthrough EES

6. PORS retirement application • Member submits: • Application for Service Retirement Benefits (PORS) (Form 6101P) • Driver’s license or state issued identification card • Copy of birth certificate and beneficiary’s birth certificate if choosing a survivor option. • Pension Withholding Certificate for Monthly Annuity Payments (Form 7202) and Electronic Funds Transfer Authorization for Annuities (Form 7204) • Employer submits: • Employer Certification of Last Day Paidthrough EES

7. Retiree beneficiaries • Retiree beneficiaries are designated on the retirement application • Section II • Recipient for monthly survivor annuity or refund of contributions • Section III • Recipient for incidental death benefit

8. Retiree trust beneficiaries • If member wants to designate a trust as beneficiary: • Notice the box in Section II • See example in appendix of how to complete the retirement application properly for a trust beneficiary. • Member must also submit a Certification of Trust (Form 1113) with the application.

9. Service retirement process • Retirement benefits are not automatic; members must submit a retirement application. • Member must be within six months of the date of retirement to submit application. • All service purchases must be paid in full prior to retirement date. • Date of retirement cannot be more than 90 days retroactive to date PEBA receives application.

10. Teacher and Employee Retention Incentive (TERI) Program • Only active SCRSClass Two members eligible to retire may participate in TERI program • Monthly annuity payments are held in escrow without interest • Retiree does not receive additional service credit during TERI participation period • Participants remit contributions as a working retiree • Participants must terminate employment at end of their TERI period

11. TERI program • After termination, retiree receives accumulated TERI balance and begins receiving his monthly annuity • Average final compensation recalculated at the end of TERI to include payment for unused annual leave paid at termination • TERI program ends for all participants June 30, 2018 • See TERI Program Reminders (Form 6376).

12. Ending TERI participation • If participant ends TERI period before original scheduled date, PEBA must be notified of early termination • You or employee can notify PEBA via phone or email • PEBA will mail to the employee: • TERI Payout Election (Form 7500); • Pension Withholding Certificate for Monthly Annuity Payments (Form 7202); and • Electronic Funds Transfer Authorization for Annuities (Form 7204).

13. Ending TERI participation • You must submit the TERI Termination Certification through EES, which is used to receive annual leave information and final TERI payroll information.

14. Disability retirement benefit • If eligible for service retirement, member may submit service retirement application at the same time as disability application • If approved for disability benefits, annuity would revert to the higher amount. • A disability retiree can choose payment Option B without any beneficiary age restrictions.

15. Disability application filing • PEBA must receive application within 90 days of terminated employment date • Employer may submit application on behalf of the member, but cannot select payment plan or designate beneficiaries • In urgent cases, fax application to Customer Service Annuity Claims Unit at 803.737.7752 • Signed application from member selecting payment plan and designating beneficiaries must still be submitted

16. Disability application • Completed by employer: • Form 6201- • Form 6253 and Form 6253 for SCRS ONLY • Form 6254 • Form 6352 • Completed by member: • Form 6151P and Form 6151S for SCRS ONLY • Form 6251 • Form 6255 • Form7202 • Form 7204 • Form 6352

17. SCRS disability retirement benefit • Member must first be approved for disability benefits from federal Social Security Administration: • generally requires an incapacity to perform any gainful occupation • PEBA must receive the disability retirement application (Form 6151S ) within 90 days of member’s date of termination from covered employment

18. SCRS disability retirement benefit • Must have at least five years (Class Two) or eight years (Class Three) of earned service unless the disability is the result of a job-related injury. • Once a copy of the Social Security Award letter is provided to PEBA: • Member’s SCRS disability annuity will be effective the later of the disability onset date established by the Social Security Administration or the day after termination from covered employment • Retroactive benefits will be paid back to the later of these two dates

19. SCRS disability retirement benefit • If the onset date for Social Security disability benefit is more than one year after the termination of covered employment, the member will not be eligible for SCRS disability retirement benefits. • Benefit calculation is based on member’s actual credited service and average final compensation as of the date of retirement, with no projection of additional service credit.

20. SCRS disability retirement benefit • If member is not yet age 65, he must provide a document indicating his continued receipt of Social Security disability benefits to PEBA each year in order to continue to receive SCRS disability retirement benefits.

21. PORS disability retirement benefit • Member must be permanently physically or mentally incapable of performing the regular duties of his job. • Member must have at least five years (Class Two) or eight years (Class Three) of earned service if the injury is not job-related. • A medical board of three physicians reviews all initial and continuing PORS disability claims and makes the initial agency recommendationon those claims.

22. PORS disability retirement benefit • Projection of service credit used to calculate a benefit is limited to the service necessary to reach age 55 or 25 years of credited service, whichever is less, rather than projecting credit to age 55 in all cases. • Reexamination may be required: • once each year during the first five years following a disability retirement, and • once every three years thereafter, for any disability retiree who has not yet reached age 55

23. Average final compensation (AFC) • SCRS and PORS Class Two members: • Average of 12 highest consecutive quarters of earnable compensation • SCRS and PORS Class Three members: • Average of 20 highest consecutive quarters of earnable compensation • SCRS Class Two and Three members: • Earnable compensation does not include pay for overtime not mandated by the employer

24. Payment plan Option A example Early retirement penalties and/or reductions may apply to SCRS members. Reduction factors will apply to members who select a joint retiree/survivor payment plan (Option B or Option C).

25. Payment plan Option A example

26. Unused leave at retirement • Class Two members: • An amount up to and including 45 days’ pay for unused annual leave from your last termination payment included in AFC calculation • Service credit for up to 90 days of unused sick leave from last employer • Class Three members: • Annual leave payouts are not included in AFC and unused sick leave is not included in service credit

27. Retirement payment options • Option A: retiree only • Option B: 100%-100% joint retiree-survivor monthly annuity plan (non-spousal age restrictions apply) • Option C: 100%-50% joint retiree-survivor monthly annuity plan

28. Changing payment option after retirement • If all beneficiaries predecease the retiree, the annuity reverts to Option A effective on the date the last beneficiary died. • If the retiree has a change in marital status, he may select a new beneficiary(s) under Option B or C and/or a new payment plan within five years of the change in marital status. The change is effective the first of the month in which the form is received.

29. Returning to covered employment Service retirees • Member must have a bona fide termination from covered employment in order to receive a retirement benefit • Retired member who is rehired into covered employment sooner than 30 consecutive calendar days after retirement, will have retirement benefit suspended while he remains so employed • TERI participation counts toward the 30 days retirement requirement • At the end of TERI participation, member must still have a bona fide severance of employment before being rehired into covered employment

30. Returning to covered employment Disability retirees • May return to covered employment after a bona fide 30 consecutive calendar day separation from service • Are subject to an earnings limitation equal to the difference between the adjusted AFC and amount of annual disability annuity he receives from PEBA • Earnings limitation is based on a calendar year • Aletter is sent every February detailing the amount of the year’s earnings limitation for public and private employment

31. Returning to covered employment SCRS disability retirees • must annually establish continued approval for Social Security disability benefits to continue receiving an SCRS disability retirement annuity • any post-retirement employment that causes loss of Social Security disability benefits will also result in the discontinuance of the SCRS disability retirement annuity

32. Returning to covered employment • Complete Notification of Employed Retiree Form 1114 if the employee is receiving a disability annuity.

33. Returning to covered employment SCRS and PORS • Members must be retired for at least 30 consecutive calendar days prior to being rehired • $10,000/year earnings limitation • Earnings limitation does not apply to: • members who retire after age 62 (SCRS) or age 57 (PORS) • members who retired prior to January 2, 2013 • earnings under the TERI Program • members in elected and certain appointed positions

34. Returning to covered employment • If a retiree returns to covered employment and works 48 continuous months for a covered employer with an annual salary of at least 75 percent of the AFC used to calculate his retirement annuity, the retiree may again join a retirement plan administered by PEBA as an active member.

35. Qualified Domestic Relations Order (QDRO) • Court order that gives a former spouse the right to a portion of a member’s retirement benefits • Outlines how to disburse the money in the event that the member retires, withdraws his contributions, or dies • Divorce decree is not a QDRO • Attorneys may view a model QDRO and QDRO guidelines on website

36. Determining member’s monthly annuity • Perform a benefit estimate for the member by logging into the Electronic Employer Services (EES) website. • Enter the member’s Social Security number where indicated for READI. • Click “Benefit Estimate” and follow the prompts.

37. Summary quiz • Can a member accrue more service credit after he retires? • If a member is active in SCRS and PORS, can he retire in one system and continue working and accruing service credit in the other?

39. Questions